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Puma get a lead on carbon emissions

German sportswear company Puma has put a price on its carbon emissions with a ‘profit and loss account’ that shows the true cost of its emissions across the board.

The the world’s third-largest sportswear manufacturing company not only put a price on its carbon usage but also represented the cost of future damage incurred from its emissions and water usage.

The analysis, which looked at Puma’s entire supply chain in detail, covered everything from the CO2 emissions from the animals that supply the leather for its shoes to the water needed to grow the cotton used in its fabrics.

To develop these first results of their E P&L, PUMA worked with accountancuy consultants PriceWaterhouseCooper (PwC) and research analysts Trucost to develop a methodology to first quantify the tonnes of Greenhouse Gas Emissions (GHG) emissions and cubic meters of water consumed in their business and supply chain operations, and then apply values to account for the associated economic impacts. The company determined that in 2010, the combined cost of the carbon it emitted and water it used was 94.4 million euros.

Puma say that they recognise that there manufacturing process has an effect all along its supply chain. A spokesman told the German press: “We wanted to look at where our biggest effects on the environment are,

“We’ve recognised that our current business model is not sustainable in the long run because we’ll eventually run up against a shortage of resources.”

As with many manufacturing concerns, a significant share of Puma’s environmental costs originate with the suppliers, many of whom are based in Asia. The company hopes that by looking at environmental impacts in detail, it can work with those suppliers – along with other companies who use them – and make sure outsourced processes are subject to the same kinds of environmental standards used in its own production.

Puma says that future carbon reports will be released with the financial accounts and subject to the same scrutiny from investors and stakeholders as the traditional year-end figures.

Consumers are becoming more carbon aware, with 45% saying they would opt for a product from a manufacturer that is clearly taking steps to reduce its carbon footprint.

This is just one of the findings from recent Carbon Trust analysis, which looked at a broad range of issues from FTSE companies’ targets to consumer shopping habits.

Carbon Trust’s research of consumer buying habits revealed that the number of shoppers prepared to shun brands that fail to display carbon footprint labels on products has doubled in the last year from 22% to 45%. When asked whether they would buy low carbon labelled goods over non-labelled goods of identical quality, the survey found that 47% are more likely to choose low carbon labelled goods over non-labelled and one in five (21%) would pay more for carbon labelled products.

However, it wasn’t all good news; despite the government recently adopting ambitious new carbon targets; only 59% of FTSE 100 companies have clear, robust targets to cut carbon emissions.

“The Government’s decision to set a legally binding target on greenhouse gas emissions beyond 2020 makes it clear that the UK intends to be a global leader in the low carbon economy. Taken alongside increased consumer demand for low carbon products, 2011 is the year for businesses to develop strategies and set clear targets to help them plan and capitalise on green growth opportunities.” Said Tom Delay, chief executive, the Carbon Trust.”

Beyond reduction targets, the analysis found that leading companies are also seeking to exploit revenue generating opportunities from the low carbon economy and are sufficiently confident of success to have set targets accordingly.

Peter Walshe, Global Director of BrandZ, said:

“This new research builds on our own global analysis and shows that the public are in a very uncomfortable place regarding climate change, they understand the significance of the issue; they recognise that businesses’ are a major emitter of emissions, and they want them to do something about it.”

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Puma puts price on its carbon emissions

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